Knox Class Action (Facilitation) Bill 2026
Ms WITTY (Melbourne) (17:08): I rise to speak on the Knox Class Action (Facilitation) Bill 2026. This bill deals with the final consequences of one of the worst failures of public administration in modern Australian history. It deals with everyday Australians who were caught up in robodebt—people who were wrongly sent debt notices, people who spent years fighting decisions that were later found to be unlawful and people who carried the stress and uncertainty of those decisions long after the notice arrived in their letterboxes.
And it deals with a simple principle: when compensation is awarded to people who have been wronged, that compensation should reach them in full. This bill before the House helps make sure that happens. I would like to share a story of one of the constituents from Melbourne.
He was a student who, like many young Australians, balanced study with work. At one point he took on two jobs to help support his family while also covering his own living expenses. He was not trying to game the system.
He was doing exactly what we encourage young people to do. He was studying, working hard and taking responsibility for himself and his family. Despite having stopped claiming income support once he was working, he later received a robodebt notice based on income averaging.
A year that included periods of study, casual work and changing circumstances was reduced to a spreadsheet calculation. The reality of this situation was ignored by robodebt in a way that a human overlooking it would not have. Then, two years later, the debt resurfaced.
By that point, he had finished studying and was working full time. Rather than being reassessed fairly, the amount claimed against him increased. The total debt eventually exceeded $10,000.
He was working full time in retail and trying to find a pathway back into study. Instead of focusing on his goals, he was trying to work out how he could repay a debt he did not believe he owed. Eventually, luckily, the debt was wiped because it should never have been raised in the first place.
But the stress, uncertainty and lost time could not simply be erased. His story is not unique. Across Australia, hundreds of thousands of people found themselves in similar situations—different lives, different circumstances and the same experience of receiving a debt notice that was generated not by the truth of their circumstances but by a flawed process that should never have been the basis for raising debt in the first place.
That is why parliament is still dealing with the consequences of robodebt today. The robodebt scheme has rightly become one of the clearest examples of what can happen when government loses sight of the people affected by its decisions. The royal commission into robodebt found that the scheme knowingly inflicted harm on economically and socially disadvantaged Australians, many of whom were already vulnerable.
It was a shameful failure of the government of the time, and it caused real harm to people who were looking to the system for support. The Federal Court, when approving the Knox settlement, described robodebt as a fiasco in public administration. That is an extraordinary observation.
It is also a reminder of how serious this failure was. This was not simply a policy that did not work as intended. This was not a program that produced disappointing results.
This was a scheme that was ultimately found to be unlawful. It caused harm. It created fear and uncertainty.
And it damaged confidence in the way that government interacts with citizens. The fact that parliament is debating this bill today tells its own story. Robodebt began as a scheme that was supposed to recover money.
Those opposite claimed it would save taxpayers $4.7 billion. Instead, it became one of the most expensive failures of public administration in Australian history. It harmed hundreds of thousands of Australians.
It led to years of litigation. It required a royal commission. And, years after the scheme was dismantled, parliament is still dealing with the consequences.
That is because the damage did not simply disappear when robodebt was declared unlawful. For many Australians, the fight continued. People challenged debts.
People fought through the courts. People spent years seeking answers about how something like this could have happened. The royal commission exposed a reality that many Australians already understood from lived experience: the harm caused by robodebt was not accidental.
The warning signs were there. Concerns were raised. Questions were asked.
Yet the scheme continued. Australians were expected to carry the burden. They were expected to prove that the government's calculations were wrong.
They were expected to defend themselves against a debt that often looked nothing like their actual circumstances. Many Australians will never forget the language that surrounded robodebt. They will never forget being treated with suspicion.
They'll never forget being made to feel as though they had done something wrong. And they will never forget hearing a former minister declare: We'll find you, we'll track you down, you will have to repay those debts, and you may end up in prison. That statement captured something about the culture that sat behind the scheme.
The presumption was not fairness, not understanding; the presumption was that ordinary Australians had done the wrong thing and needed to prove otherwise. That approach caused immense damage. The Albanese Labor government has taken a different approach.
We established the royal commission. But accountability is not only about understanding what went wrong; it's about making sure it cannot happen again. Since the royal commission reported, the government has implemented 52 of the 56 recommendations.
That work has included strengthening oversight across government, improving administrative review processes, enhancing the Ombudsman's powers and putting greater emphasis on transparency, accountability and proper legal advice in public administration. Importantly, we have also taken steps to make debt management fairer and more responsive to people's circumstances.
Changes have expanded access to debt waivers in special circumstances. The government has also increased the small debt waiver threshold so people are not burdened by debt recovery processes where pursuing a debt serves little practical purpose. These reforms are about restoring trust—trust that government decisions are lawful; trust that vulnerable people will be treated fairly; and trust that systems exist to support Australians, not overwhelm them.
The lessons of robodebt extend beyond one failed scheme. The lesson is that people must remain at the centre of government decision-making. The lesson is that technology can never replace fairness.
The lesson is that governments must never lose sight of the real-world consequences of administrative decisions. This bill is another important step in that process. The Commonwealth reached an agreement in the Knox class action in September 2025, with approximately 168,000 class participants affected by robodebt.
The Federal Court approved that settlement in June this year. It is the largest class action settlement in Australian history. It recognised that harm had occurred, that Australians who were affected by robodebt deserved compensation and that the consequences of this scheme extended far beyond the debt notices themselves.
But there is a cruel irony at the heart of this legislation. After all the court proceedings, after all the inquiry's findings and after compensation was finally secured, some Australians affected by robodebt could still face new financial consequences if parliament did nothing. Without this legislation, Knox settlement payments would be treated in the same way as other lump sum compensation payments.
In some circumstances, it could even leave recipients facing unexpected financial liabilities. Think about that for a moment. Australians were wrongly targeted by robodebt.
Many spent years dealing with debt that should never have existed. Many fought lengthy legal battles. Many carried enormous stress and uncertainty.
Then, when compensation was finally secured, they were potentially facing further consequences because that compensation had been paid. This government does not believe that should happen. If compensation is being paid because harm occurred, that compensation should remain with the people who suffered the harm.
The purpose of compensation is to provide redress, not to create another administrative obstacle or to create another debt. And the purpose is certainly not to force people back into the system that caused so many problems in the first place. That is what is at the heart of this bill.
It recognises that robodebt was not an ordinary situation. The measures in this bill ensure that Knox settlement payments are exempt from a number of arrangements that would ordinarily apply under the Social Security Act, the Veterans' Entitlement Act and the National Disability Insurance Scheme Act. The government will also progress complementary exemptions relating to other Commonwealth systems.
The objective is straightforward: we want people to receive the compensation that has been awarded—not part of it, not most of it, but the compensation they are entitled to receive. We want to close this chapter properly, and that means ensuring robodebt victims receive the full benefit of the settlement. Ultimately, this bill is about people.
It is about recognising the consequences of decisions made in this place and in government offices. It is about understanding that, when government gets something badly wrong, the responsibility to fix that mistake does not end with an apology. It requires action, and that is what this legislation provides.
Earlier I spoke about a Melbourne constituent whose robodebt claim eventually grew to more than $10,000. The debt was ultimately wiped because it should never have existed. But for years he carried the burden, he carried the stress, he carried the uncertainty.
He carried the responsibility of trying to prove that the government's calculations were wrong. At a time when he should have been focused on his studies, his work and building his future, he found himself dealing with a problem that should never have been created. This history helps explain why this legislation is before us today—not because it changes the past, not because it erases what occurred, but because it recognises that Australians who have already been harmed should not be disadvantaged again.
The Australians affected by robodebt did not ask to be part of a class action. They did not ask to be part of a royal commission. They simply expected government to treat them fairly, lawfully and with respect.
Many were let down. This bill will not undo the stress and the hardship that people experienced. It will not return the years they spent dealing with a scheme that should never have been operated.
But it will help ensure that, when compensation has been secured, the compensation reaches the people it was intended for. That is fair. That is responsible.
And, after everything Australians affected by robodebt have been through, it is the very least they deserve. For those reasons, I commend the bill to the House.